The Economist’s Guide to Parenting (Ep. 39)

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Our newest Freakonomics Radio podcast is called “The Economist’s Guide to Parenting.” This is the second of five hour-long podcasts we’ll be releasing over the coming weeks. Some of you may have heard them on public-radio stations around the country, but now all the hours are being fed into our podcast stream. (You can download/subscribe at iTunes, get the RSS feed, listen live via the media player above, or read the transcript here.)

I know what you’re thinking when you read the title of this podcast. You’re thinking what the **** — economists? What can economists possibly have to say about something as emotional, as nuanced, as humane, as parenting? Well, let me say this: because economists aren’t necessarily emotional (or, for that matter, all that nuanced or humane), maybe they’re exactly the people we need to sort this through. Maybe.

You may remember that we wrote a bit about parenting in Freakonomics; now we’ve put together an entire roundtable of economists to talk about a great many elements of child-rearing, with one essential question in mind: how much do parents really matter, and in what dimensions? So you’ll hear about parents’ effect on everything from education and culture cramming to smoking and drinking.

The economists include: our very own Steve Levitt; Betsey Stevenson and Justin Wolfers (both of whom show up on this blog regularly); Bruce Sacerdote; Joshua Gans (the author of Parentonomics: An Economist Dad Looks at Parenting; Melissa Kearney (whom you heard in our “No-Lose Lottery” podcasts); Valerie Ramey; and last but very, very much not least, Bryan Caplan (the blogger and author of Selfish Reasons to Have More Kids: Why Parenting is More Fun and Less Work Than You Think.

If you are like me, you will: learn a lot; gnash your teeth a lot; and laugh a lot.

Steve Levitt with his wife and four kids.

A few highlights:

LEVITT: So, I’m probably not a very good parent in the sense that I don’t obsess very much about my children’s success. I just kind of figure that everything’s going to turn out all right for them. And I probably wait far too long going down the path of things now turning out before we get involved. So, for instance, two of my kids were terrible readers for a long time. And they read fine now, but probably if I’d been paying more attention I would have been more troubled by it, I would have, you know, put them into tutoring programs and other things much more quickly.

Bruce Sacerdote and family

Bruce Sacerdote, whose research on adoption is featured prominently in the show, talks about some of the areas where nurture beats out nature:

SACERDOTE: You see that children are picking up their parents’ smoking and drinking habits with a very high degree of correlation, and it’s the same with the adoptees and the non-adoptees, they really pick up their parents’ habits, those type of habits explicitly. Another thing that’s undoubtedly contagious is that behavior of how you interact, how you treat other people, how you treat employees at a restaurant, or a retail store or something. I think those things are probably highly contagious as well.

Bryan Caplan with wife Corina, twins Aidan and Tristan, and baby Simon – named after the economist Julian Simon, who inspired his existence. (Courtesy Emily Korff of Veralana Photography)

And Bryan Caplan on the startlingly slim effect that parents seem to have on their children’s lifetime income:

CAPLAN: The Korean War orphans were adopted in the ‘50s and ‘60s at a time when it was much easier for low-income families to adopt. So, families were eligible as long as they were twenty-five percent above the poverty line, which would be quite unusual today. So, these kids were raised by a much broader range of the socio-economic spectrum than would happen to adoptees today. And yet, the finding of the study by Bruce Sacerdote was that the kids raised by the very poorest families grew up to have the same income as the kids raised by the very richest families. It’s striking that it’s the kind of thing that you would think of as being more about upbringing broadly defined than a lot of other traits. So it could be that it’s actual upbringing where your parents instill the value of a dollar and hard work in you. Or it could be something more like nepotism where because you get raised by the right kind of parents you get good connections, they actually make a phone call for you. And yet, actually the very best studies of the nature and nurture of income find that parents do have a moderate effect on your early income when you’re in your twenties, but basically zero for the rest of your life.

Justin Wolfers and Betsey Stevenson with the beguiling Matilda Sloan Wolfers (the only child to appear in our radio show) (Courtesy of Sarah Miller Photography)

You’ll probably hear more from Betsey Stevenson and Justin Wolfers in this hour than anyone else (as well as their beguiling 19-month-old daughter Matilda); they are very entertaining talkers when it comes to parenting. And candid too:

STEVENSON: I think that the hardest thing as a parent is to admit that you’re going to take risks with your child’s life, to actually admit out loud, I take risks with my child’s life. If you said that at a cocktail party, people would look at you like you were a monster. But of course we take risks with our lives everyday. I take Matilda out on to the sidewalk and we cross streets. Every time we cross a street we’re taking a risk. It’s not risk free to cross the street, or to ride the subway, or to go in the car. Almost everything we do has risks, and as economists I think Justin and I are really comfortable with thinking about risks and making decisions with them. And that means we have to face the really painful thing, which is we take risks with our child’s life.”

Melissa Kearney and offspring

And Melissa Kearney on how an economist mom talks to her kids:

KEARNEY: The way I explain things to my kids, I hear an economist talking to them. I mean, I explain everything to my kids in terms of opportunity cost. My daughter, when she was two in the grocery store, and I’m like, “Listen, you’re making choices and if you pick that you don’t get that.” Right, there’s a cost to your choices? And I’ll hear my son tell my daughter — they’re toddlers speaking — they’ll be like, “Look, you made a bad choice.”

Valerie Ramey with husband Gary, also an economist at UCSD; and their children Michelle and Sean.

Joshua Gans







Thanks to all the above economists and many others whose research we drew upon, and to everyone involved in producing the show. Additionally, here are a few of the research papers the show mentions or alludes to:

Product Recalls, Imperfect Information, and Spillover Effects: Lessons from the Consumer Response to the 2007 Toy Recalls.”

The Rug Rat Race.”

Bargaining in the Shadow of the Law: Divorce Laws and Family Distress.”

What Happens When We Randomly Assign Children to Families?”

The Paradox of Declining Female Happiness.”

Parental Education and Parental Time with Children


It seems like everyone on this podcast missed one of the main benefits of having kids: they'll take care of you when you're old. That seems like the real trade-off - some relative unhappiness in the near term for more security in your old age.

I don't think anyone mentioned that obvious benefit (unless I missed it, it was pretty long).


Don't count on it!

Jaclyn Magnusson

The couple who is not married said that they saved $20,000 /year by not being married. I think this would make a good podcast topic - Economist perspective on marriage - I am planning to get married in the next few years and think this would be good to hear before I make that step...


Ditto! I've been engaged for 2 years, and are not planning a wedding as my fiance is currently out of work. Perhaps since we are not economists earning big bucks it would be different. I had not heard of marriage costing more, aside from the wedding.


Question: How does Bruce Sacerdote's research stating that "children are picking up their parents’ smoking and drinking habits with a very high degree of correlation, and it’s the same with the adoptees and the non-adoptees" reconcile with David C. Rowe's who is cited in a Malcolm Gladwell article on the influence of parents (

Gladwell states that per Rowe's research "children of smokers are more than twice as likely to smoke as the children of nonsmokers...but if parents really cause smoking there ought to be elevated rates of smoking among the adopted children of smokers, and there aren't." He ends the paragraph by saying "with smoking, as with niceness, what parents do seems to be nearly irrelevant."

These seem to be similar studies ...are they just coming up with very different conclusions or is there some other explanation?



We learn as a parents that we are only able to control a few elements of our children's lives. When my husband and I bought our house in 1991, the first thing we did was remove the swimming pool because we were worried about safety (and expensive maintenance.) We have four children now, and although we try to be "there" for them, it seems that large scale interventions can have puzzling results. Choices about education that seem clear at the time turn out to be wrong; your child is his/her own person from the very start. But we never regretted taking out the pool, although everyone in town fell out of their cars as they watched us do it!

Cañada Kid

One thing that bothered me about this podcast is that all the economists focused on quantifiable and numberical results form parents help/lack thereof. What about morals, characteristics, political/social views? Many religious kids inherit their parents' beliefs.

Cañada Kid

After finishing the podcast (I was only halfway through it at the time of this post), I still think they focused on academic and quantifiable results as well as on very obvious moral decisions like smoking and drinking


First Snickers bar... We didn't give our daughter chocolate until she was about 3 years old. I video'd so many things, and my biggest regret is not video'ing when we gave her chocolate for the first time. We gave her one of those Dove chocolate squares, and the look in her eyes, on her face, the salivation... right there and then we created an addict. Any questions I had about why our society struggles with weight problems were immediately answered. The power of chocolate is probably something with which we, as mere mortals, should not have been entrusted.


Anybody know he main song played throughout?

Timothy Travis

I didn't know this until well into the parenting of my (now) 21 and 17 year old daughters, but I know the meaning now of that cliche about the child being parent to the man/adult. Being a parent made me more mature than I was before--to an extent that surpasses the mere passing of that many years. I had to learn about putting someone else's needs above my own and to eschew what was most convenient and in my short term interest. I look around and know that having children doesn't get those lessons across to everyone. But it worked that way for me. I was 42 years old, by the way, when I became a father. I speculate that this is what having children is "designed" to do, but whether such a noti0n is true or not doesn't change the importance of the phenomena it is designed to account for.

Great podcast, but, then, I like them all.


I just listened to the podcast. A few things bothered me. You asked what the qualitative states for the parents were (their level of happiness going down after having children), but you never asked about qualitative states for the children. You sort of assumed that all children hate classes and languages and music lessons, and that just isn't the case. Some enjoy things like music lessons after they have been forced encouraged for several years, because music is not a skill that is immediately rewarding.

Anecdotally I wish my parents had forced me to keep up with music lessons; today I'd love to be able to play music. Not to mention all of the studies that show music to improve brain function, especially learning to make it.

Another point is the "happiness level" of the parents with and without children. What were the metrics of this? Levitt talks near the end of self-delusion being strong, but are whatever data you are relying on for happiness levels self-reported? How did you measure this? What kind of happiness? In the moment? Lifelong satisfaction? Pride in creation? Or just day-to-day dreariness of mundane tasks that need accomplished?

I fully understand (I think I do, anyway) that the super-obsessive parenting is just a waste of time in terms of academic achievement and future income, but I think it's conducive to a fun, jam-packed, adventurous and experience filled life! I love to take classes, I love to learn, I love to travel, and I love to go to museums, and I think if I had children (I have none) I would still continue to do those things, not as an investment, but because I enjoy it. I guess since they'll have my DNA they'll enjoy it too.

(Disclaimer: I still have to look at the above-referenced article as to happiness levels, and will perhaps find some answers there.)


Ethan D

Wow. An entire show about reproduction and only one mention of evolution (I think it was Levitt, right at the end.) Why have kids? We've evolved to do so.
Here's a simple thought experiment: where are the tribes of people who _don't_ have traits that make them prone to having and successfully raising kids? (Like a sex drive, the 'biological clock', being a sucker for babies, wanting to nurture others). Answer: they're all extinct. All humans--all sexual species--have innate drives that result in reproduction.
The stories we tell ourselves of the 'benefits' of children or the 'value' in having a family are just accessories the conscious brain uses to dress up the innate.
And as for those who don't want kids or choose not to have them, that's probably an expression of the diversity of those traits mentioned above (just like height or strength or bone density); but the 'not wanting to have kids' end of the spectrum is, ipso facto, unlikely to be passed on as much :).



Excellent point! And "failed contraception" as a pretty frequent reason for having children as well.


I really enjoyed this podcast! One criticism though - your children's academic achievement and future earning capacity may not be the best way to measure the success of your parenting. Childhood is more than preparation for adulthood, so I think it's reasonable to view the happiness and wellbeing of children as a measure of success in itself. Personally I'm more concerned that my child grow up to have good mental health, self-esteem, positive attitudes with others and the freedom to follow his interests than I am in him having a high-earning career.
Also on the point of removing the activities which have the greatest cross-over of dislike with adults and children, how about school?

Mark S.

Here's a sterling example of the old saw: "Economists know the cost of everything, but the value of nothing."

Witness the soul searching of Betsey Stevenson, who along with her partner, sounds like an adoring and attentive parent, and yet she cannot quite get over her observation that according to a statistical analysis, she's likely to experienced reduced happiness due to parenthood.

Despite her obvious brilliance, Dr. Stevenson can't see the obvious truth that statistical averages are not individual prognostications.

Here's a few examples which appear to contradict the idea that "parents don't matter":

-- Increased television viewing is strongly correlated with attention deficits, unhealthy adult weight, etc

-- Unhealthy food consumption is strongly correlated with adult metabolic pathologies

Both of these are completely under parental control. One could easily make a much larger list of such factors.

Finally, it's quite obvious that the underlying data supporting the conclusions about the minimal impact of parenting only accounts for a few variables, and yet real life parenting involves a great many, a number of which provide synergistic effects (positive and negative).

In conclusion, the proclivity for economists to form narrow, non-holistic conclusions is why you probably shouldn't allow them to be placed in charge of matters of importance. As evidenced by the participants in this program, they often don't even take their own advice to heart.



What about the Perry Preschool study that determined a whole host of statistically significant differences in adults that had been to preschool for two year versus those that hadn't.

I'm very surprised that isn't mentioned as it is something that is clearly under parental control and was proved, by economists, to make a startling difference (in crime levels, income, savings etc).

I heard about it on Planet Money: and I see that there's an article in Wired from last year:

Lastly, as another type-A parent we taught our daughter sign language (or, more precisely, we learnt some sign language together). The jury is out on whether it will help her in the long run but who cares: do you know how much fun it is to sit outside with a 10 month old baby and have her say "dog" and "cat" and "flower" and "swim" and "sun" and "cloud" and "wind", pointing at the stuff and getting excited. The little thing couldn't even walk and she was speaking to me already (she had a vocab of over 50 signs and she understood another 50 or 60 before she was one). Just saying...